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Thursday, November 14, 2019

Bill Would Exempt Most Government Parking Lots From Parking Excise Tax

You will recall that we reported previously (here and here) on the new state legislation that imposed a parking excise tax on parking garages and lots. That tax would range between 6% and 9%, depending on the parking fee. We raised a question as to whether the tax would apply to municipally-owned and operated commuter lots and garages. In our opinion, the language of the statute was not broad enough to apply to lots and garages operated by government entities. However, there appeared to be some confusion about that at the state level and municipalities were receiving mixed-messages about the application of the tax. The Illinois Municipal League had suggested to Illinois legislators that an statutory amendment was necessary to ensure that municipal lots and garages were not covered by the tax. 

The Illinois House just introduced HB3968 that would add a provision to address government parking lots and garages. If passed, parking lots or garages that are owned or operated by the federal government, state, municipality, RTA, Chicago park district, or any other government entity would be exempt from the tax if the parking fee does not exceed $3 for a 24 hour period or less, $15 for a weekly period, or $60 for a monthly period. It also exempts parking when the fee is paid by a federal, state, or local government entity.

This legislation will add certainty to this issue as municipalities have been receiving mixed messages as to whether the parking tax must be imposed and collected on commuters and others who use municipal parking lots and garages. 


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